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Stock Opinions by David Baskin

COMMENT
So much about the market depends on progress in the Ukraine war and no one can predict what will happen. Will Putin escalate or will there be a settlement? Inflation is the other major market driver, some of which is linked to the Russian war, namely grain and oil. Inflation won't magical go away if the war is settled, but prices will relax some. So far in 2022 non-profitable companies have been severely punished, like Peloton, Door Dash and Shopify.
Unknown
BUY
Effect of buy-now, pay-later stocks? Visa is a vital intermediary in almost all transactions, and it has a tremendous grip (with Mastercard) on world payments, and this won't change even with these stocks. Covid's slowdown of travel is ending and this will list Visa, a great stock to hold for the future.
other services
BUY
The Russian war shows us how much the west depends on oil and natural gas from Russia, which is not a good situation. Countries will be more self-sufficient in energy. This means more renewable and nuclear energy. Germany likely regrets mothballing nuclear. Renewables are a good place to be and Canadian offers some good names. AQN and most others are good. The stock hasn't been huge lately, but demand from retail and corporate investors for green energy will push shares higher. ESG is the future, says the street. People buy these companies mainly for the income. This is a solid choice. The dividend will likely rise.
electrical utilities
BUY
The dividend is the attraction here. They have a track record of raising that. They have a leveraged balance sheet, like utilities do, so rising rates will raise their debt service costs. but inflation will allow Emera to charge more to customers. There's usually a lag between inflation and rate increases, though. The dividend is solid. A good stock for an RRSP.
mngmnt / diversified
COMMENT
Suncor vs. Keyera Very different companies. SU is huge, vertically integrated. KEY is a midstream that processes and distributes nat gas. Keyera is paid by the volume they produce, so it's a steady business. But SU relies on the price of oil, which is high now, but was low 24 months ago. SU also has refinery operations and retail, so there are revenues there too, and slightly less dependent on crude oil prices. Do you have the highs and lows of Suncor or the steadiness of Keyera?
integrated oils
COMMENT
Suncor vs. Keyera Very different companies. SU is huge, vertically integrated. KEY is a midstream that processes and distributes nat gas. Keyera is paid by the volume they produce, so it's a steady business. But SU relies on the price of oil, which is high now, but was low 24 months ago. SU also has refinery operations and retail, so there are revenues there too, and slightly less dependent on crude oil prices. Do you have the highs and lows of Suncor or the steadiness of Keyera?
oil / gas
COMMENT
Effect of the inverted yield curve? That curve measures interest rates from 30day money to 30-year. The longer you invest, the more you should get paid. What's happening now is that very-long duration bonds have declined as short-terms have risen. So that yield curve is flat. Sometimes, an inverted curve presages a recession, but he's not sure this will happen. When central banks unwind long-bond positions, he expects that yield curve to rise and will sort out the inversion. No, this isn't an issue for BNS.
banks
BUY
An excellent company well-placed for EVs. He has owned this in the past. This is not a bad pick in this industry.
Automotive
PAST TOP PICK
(A Top Pick Jun 04/21, Up 25%) People were looking for solid income stocks. They hold industrial RE, including Europe. They've diversified its base, are handling its debt well and making acquisitions. Solid for income and moderate growth.
property mngmnt / investment
PAST TOP PICK
(A Top Pick Jun 04/21, Up 12%) Still his #1 Canadian bank pick. NA has little competition in Quebec, compared to the rest of Canada. Are very successful in managing wealth and proprietory trading. Will benefit from rising interest rates. A solid pick.
banks
PAST TOP PICK
(A Top Pick Jun 04/21, Up 44%) He loves it. The model of selling premium memberships makes so much which offsets the lower spreads on merchandise. Great managers. They're smart on locating stores. There's still a lot of room to expand. He's a big fan.
department stores
DON'T BUY
Buy a stock before or after a stock split? It has a lot to do with psychology, because a split creates no economic value, but stocks tend to rise after a split is announced. The strategy is to sell right after the split announcement, then buy it back later. CM stock is ahead of itself. Its PE is higher than its peers while its dividend has declined.
banks
BUY
Should be a core holding in a portfolio. Low growth, but pays a great dividend. You're buying stability and income. Shares may rise 2-4% a year + the dividend. Alternatives don't pay as much and are riskier.
telephone utilities
COMMENT
The cost of shipping containers The cost of shipping containers have skyrocketed because of supply shortages. He doesn't know when this will be solved, but the volatility in shipping rates is wild now. The current shipping price is headed to drop. Do not chase these profits, because they won't last.
Unknown
COMMENT
Effect of rising interest rates on insurers All insurers are in a great position to benefit from rising interest rates. The long-end of the yield curve should rise later this year, so all insurers will benefit.
Unknown
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